Xyros, a painter of religious icons, confirmed that Hercules Kostaris, 36, an estate agent from Athens who has been jailed for the Saunders murder, also fired shots, but he did not know if they hit.

He added that his younger brother, 28-year-old Vassilis Xyros, acted as a lookout.

The diplomat was killed as he sat in his car in a traffic jam on his way to work at the British embassy in June 2000.

The group had said it targeted him because he had allegedly participated in the planning of Nato bombing raids against the Serbs in Kosovo, "which led to the massacre of hundreds if not thousands of innocent civilians".

The British Government has denied that Brig Saunders was involved in Kosovo.

Xyros also confessed that he took part in the killing of another British national, the shipping magnate Costis Peratikos, who was murdered in Piraeus in 1997, and that he attempted to murder the German ambassador by firing a rocket at his residence in Athens.

Xyros was captured on June 29, when a bomb he was planting at Piraeus harbour exploded in his hands. His subsequent statements led to the arrest of the November 17 leader and 15 gunmen.